In this episode:
Recent global shifts have brought into focus the fundamental importance of the agri-food system for governments, consumers, and businesses across the global economy. In addition, the production and consumption of food are increasingly seen as central to key societal challenges, including reducing GHG emissions, protecting biodiversity and natural systems, and addressing poverty and food insecurity. Canada has historically been a key innovator in agri-food and continues today to be a leading food producer and innovator with the potential to shape the future of the industry.
In this podcast episode produced in partnership with the Centre for Building Sustainable Value at Ivey Business School and the Institute for Sustainable Finance, our panelists explore the large-scale opportunity for Canada to be a leader in agri-food, examining facets such as sustainability, technological innovation, and competing within a global market. For this discussion moderated by Bryan Benjamin, Executive Director of The Ivey Academy, we’re joined by guests: Scott Ross, Executive Director, Canadian Federation of Agriculture; Alison Sunstrum, Founder & CEO, CNSRV-X & General Partner, The51; and Tyler McCann, Managing Director, Canadian Agri-Food Policy Institute. Together, our panelists unpack Canada’s position in the global agri-food market, identify key opportunities – and challenges – facing Canadian agri-businesses, and explore how Canada can be a leader in the future of agri-food.
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Q & A
We were not able to address all of the audience questions submitted during the live recording of this learning event. Jury Gualandris, Associate Professor of Operations Management & Sustainability at Ivey Business School and Faculty Director of the Centre for Building Sustainable Value answers some audience questions here in this Q&A segment.
Q: I am excited to attend this webinar today. I am curious: Are we doing enough in Canada to integrate Indigenous expertise into our science and technology thinking?
A: Recently, several Canadian and International organizations, such as Smart Prosperity (2021), Forum for The Future (2022), Metabolic (2017), and the Ellen McArthur Foundation (2021), have engaged in stakeholder-driven initiatives imagining the crucial features of sustainable agriculture. They converged on a vision that is characterized by the following features:
Circular: Circular agriculture connects actors that are geographically proximate but operate in different, specialized supply chains, such that the resources wasted by one actor, for example crop residues and manure, can productively feed the processes of another, generating significant reductions in carbon emissions (up to 30%) (LaSalle and Hepperly, 2008; Jain and Gualandris, 2023) and increasing carbon sequestration and storage in healthy soils (up to 30% in 30 years) (FAO, 2014; Bach et al., 2020).
Diversified: Promoting the diversification and localization of investments and production methods allows for a larger variety of crops, produce, and livestock, with positive effects on soils and their ability to sequester carbon (Teague et al., 2016). Further, diversification helps prevent the over-consolidation of land and markets, making local communities less dependent on national and global supply uncertainties (Bloomfield, 2023).
Inclusive: Sustainable agriculture requires the collaboration and co-creation of solutions across supply chains (crops vs. produce vs. livestock), scales of operations (large vs. small players), and socio-cultural divides (settlers vs. indigenous). Connecting farmers across silos brings diverse perspectives and expertise and centers actions around farm communities, allowing solutions to be adapted according to lived experiences and local climate.
In key agri-food projects under development at the Ivey BSV Centre, as well as in future webinars, we apply Two-Eyed Seeing: a process that promotes co-learning and inter-cultural collaboration between Indigenous and Western ways of knowing and doing (Hatcher et al., 2009). We must grow inclusivity to challenge and evolve our paradigmatic assumptions and ways of knowing and doing.
Q: What can we do about the demographic and labour challenges in Canada? The average age of a farm operator is approaching around 60 in Ontario.
A: This is a complex question for which we do not have a clear answer. Based on our recent research, which will be featured in future events of this series, we see a growing generation of young farmers who are keen to innovate the sector and elevate its positive impacts on our economy, society, and natural environment.
An additional resource is available here: Obregón J-F., Aguanno M., Brooking M., and Arjaliès D-L., (2023a) Advancing Regenerative Agriculture in Canada: Barriers, Enablers, and Suggestions, Western University
Q: How about a system that would generate 900,000 lettuce plants per acre per year? Wheat at a yield of 1500 bushels per acre per year? This program was conceived in the mid-80s by producing a 450-gm head of leaf lettuce in 28 days. Plant growth is a very small part of the overall design. The funding is in the billions, which at one time was in place except the powers to be in government said no. The funding model also requires so many changes to current policies that, at least in my humble opinion requires too much work and a lack of understanding on how to fund large entrepreneurial projects in a sustainable fashion.
A: We must be careful about monocultures and approaching agriculture with a narrow lens on efficiency. In fact, while monocultures have helped to make food more affordable, they often undermine the ability of ecosystems to regenerate and sustain themselves. Here are a few examples:
In Indonesia, over 55% of arable land, expanded over time by clear-cutting old-growth forests, is dedicated to the production of palm oil fruits (Gaveau et al., 2022). This level of specialization and scale is justified based on an efficiency argument, according to which palm plants represent the most productive way of producing vegetable oil per hectare of land (WWF, 2023). By the same token, canola and wheat crops represent 25% and 27% of Canadian farmland, respectively, and the production of canola in Canada has doubled since 2010 (AAFC, 2017; Stats Canada, 2022). California’s Central Valley is perfect for almond growing, and today more than 80% of the world’s almonds are produced there (Martin, 2019). In the UK, 85% of farmland is used for feeding and rearing livestock (Galbright, 2023). Similar patterns of specialization and concentration are experienced in other sectors, including manufacturing, financial services, and retailing (e.g., Foer, 2023).
However, increasing profits through efficiency, specialization, and scale has knock-on effects for socio-ecological systems. As Martin (2019, p. 51) explains: “California’s almond blossoms all need to be pollinated in the same narrow window of time because the trees grow in the same soil and experience the same weather. This necessitates shipping in beehives from all over America. At the same time, widespread bee epidemics have created concern about the US population’s ability to pollinate all the plants that need the bees’ work. One theory about the epidemics is that because hives are being trucked around the country as never before for such monoculture pollinations, the bees’ resistance has been weakened."
In Canada, the WWF has estimated that species that are at risk of global extinction have seen their Canadian populations decline by an average of 42% in the last 50 years, mostly due to the over-exploitation of commercial species (monocultures). Moreover, according to Statistics Canada’s Canadian Income Survey, in spite of growing exports of Canola and other crops, 5.8 million Canadians, including 1.4 million children, lived in food-insecure households in 2021. The Canadian Climate Institute has estimated that, by 2025, the Canadian economy will shrink by $25 billion relative to where it would be if global warming and ecosystem services had stabilized in 2015 (CCI, 2022).
Q: What are actionable ways to more quickly connect/work with boots on the ground stakeholders – for example, local regulatory bodies/information centers (OMAFRA), other players working towards these ideas (e.g. The Grove at the Western Fair District) and the growers themselves?
Agriculture and Agri-food Canada (AAFC) is now leading the development of the Sustainable Agriculture Strategy (SAS), defined as “a shared direction and vision for collective action to improve environmental performance and enhanced resilience to climate change in the agriculture sector” (AAFC, 2023). In this strategy, collective action is seen as essential to develop new sustainable agriculture principles and protocols that are proposed by farmers to guide the work of farmers.
Collective action refers to action taken together by a group of people, in this case, farmers, whose goal is to achieve a common objective — sustainable agriculture — and whose resources and capabilities are often interdependent and complementary (Gatignon & Capron, 2023; Ostrom, 1990). Collective action is expected to provide a mechanism for peer-driven co-creation, experimentation, and institutionalization of new ways of farming and co-managing resources that are ecologically effective and yet economically efficient. Collective action that brings together a critical mass of diverse farmers can illuminate ways to configure diverse sustainable production practices to reduce carbon emissions and increase carbon sequestration.
The BSV Centre is leading a project that will create more connectivity between diverse farmers as well as between farmers and other local and provincial organizations to collectively discuss, co-create, and deliberate on new ways of farming, distributing foods, and co-managing resources.
Q: According to RBC Climate action report, by 2033, 40% of Canadian farm operators will retire, placing agriculture on the cusp of one of the biggest labour and leadership transitions in the country's history. Taking this into account, how do feel we can best repsond to ensure Canada remains a global leader.
A: We could possibly reframe the question: what do we want to lead, and in what way? How can Canada impact the world most significantly and positively? We are now among the global leader in food exports. Should we continue to prioritize the volume of exports, or could we also focus on value-adding knowledge and services for sustainable agriculture?
It is also interesting for us to consider in a truly sustainable and resilient global future, how much we should other countries rely on the export of Canadian foods, and whether we should also be significantly reducing our own dependence on imported food. These are perhaps challenging questions for our agri-food system, but at Ivey, we feel it is important for our contribution to these debates to be asking challenging questions!
ALISON SUNSTRUM: We have a chance to really take a step out and be the most sustainable, technologically-advanced, and farmer-friendly and farmer-profitable country. I'm super excited about this opportunity.
SEAN ACKLIN GRANT: Welcome to the Ivey Academy presents Leadership in Practice, your source for insights, research, and experts on critical emerging issues in business. The global agriculture system is undergoing radical shifts, food security, supply chain management, affordability, and sustainability. All are critical to the long-term health of individual countries and the international economy.
In this special episode powered by the Ivey Center for building sustainable value and the Institute for Sustainable Finance, we invite three leading figures in Canada's agrifoods industry to discuss the critical role of sustainable agriculture in addressing global challenges. Joining us are Scott Ross, Executive Director of the Canadian Federation of agriculture, Alison Sunstrum Founder and CEO of CNSRV-X, and Tyler McCann, Manager Director of the Canadian Agrifood Policy Institute.
Listen in as we explore the impact of technology, talent, regulation, and global connectedness in the agrifood sector. This episode is hosted by Bryan Benjamin, executive director of the Ivey Academy at Ivey Business School and also features Jury Gualandris, Ivey faculty member and Director of the Ivey Centre for Building Sustainable Value.
BRYAN BENJAMIN: Hello, and welcome to our Ivey Academy livestream. My name is Bryan Benjamin, and I'm the executive director here at the Ivey Academy. Thank you so much for joining us.
Today's conversation is actually the first in a series to explore Canada's role in the future of agrifood system and the key opportunities and challenges facing this sector. This series aims to foster awareness amongst business leaders shedding light on the crucial dynamics within Canada's agrifood sector, especially the critical issues associated with the transition of the sector towards net zero. This series is a collaboration between the centre for Building Sustainable Value, BSV Centre-- you'll hear me say it as an acronym throughout-- at the Ivey Academy and the Institute for Sustainable Finance.
To tell us more about this series and the work of the Center for Building Sustainable Value, we have Ivey's own Jury Gualandris joining us. Jury is an associate professor of operations management and sustainability and is the faculty director of the BSV as well as the network for building sustainability. Jury, thank you so much for joining us. I'll hand it over to you.
JURY GUALANDRIS: Thank you. Thank you for the great introduction. Thank you, everyone. My name is Jury. I'm Italian but joined the Canadian movement in 2017, and I've been working here since then.
The Ivey BSV center has been established about 20 years ago and has focused on sustainability issues in different sectors mostly from a research and leadership programming perspective. But more recently, we decided to expand our contributions and frame them in the context of systems change. I believe Ivey has a lot to offer in terms of thinking through incentive structures, pioneering new practices, accelerating entrepreneurship, as well as building community. So we thought through our role within system transition, and the series today represent one of the things that we are currently doing in that space.
It is important to mention that the center recently has been recognized for its contributions to the transition by the Financial Times. We ranked third in the world in terms of integrating SDGs, the Sustainable Development Goals, into impactful research that is published in top journal and disseminated throughout different countries.
Why focusing on agrifood? Well, if we want to be perceived as a legitimate, impactful player in the space and if we want to talk about systems change, we need to deal with real systems. And we think that agrifood is a fantastic place to start because it has a strong influence on the Canadian economy and it is also the source of major impacts from carbon to biodiversity, is also the source of the solution.
There are ecosystem services that could be regenerated through the work of our farmers and processors. But obviously that requires an orchestrated concerted effort that moves in towards one vision and direction hence why the series that we put together. And we start today. We have a great panel of leaders, and I'm sure I will learn a great deal from them.
There are questions to be answered in terms of what are new labels and standards that could develop in the space, how this development should be happening rather out or top down or bottom up? What's the right way to go about it? How financial incentives could be redirected according to these new standards. What's the role of financial services, banks, and policymakers in this transition? And we have presence as a business school in all of these spaces in the broader ecosystem that concern AG.
So from the event today, I hope we will start to unpack some of these questions. And I'm really glad to, as you highlighted, that we are collaborating with the Institute for Sustainable Finance because this is not a one-man show or something that can be achieved in isolation requires really a collective effort. And that's what we stand behind.
BRYAN BENJAMIN: Amazing. Thank you, Jury, for getting us going and providing a little bit of context on some very important and exciting work. So to build on your comment, we do have three fantastic panelists joining us today. And I'm going to do some quick introductions here, and then we're going to get going.
So first up, Scott Ross is the executive director at Canadian Federation of Agriculture. After serving as assistant executive director since 2018, Scott was promoted to the executive director position in 2022. Prior to that, Scott served as CFA's director of BRM and foreign policy for six years where he covered a wide variety of agricultural issues.
Scott's policy work has given him a unique insight on how to develop and implement policy while balancing a diversity of stakeholder interests. He has an extensive background in collaborating across the agrifood sector to achieve ambiguous-- ambitious goals, sometimes ambiguous, most recently, including co-founding the agriculture carbon alliance, a coalition of 15 national farm associations advocating on behalf of farmers with regards to carbon pricing and environmental policies.
Next up, Alison Sunstrum is CEO of CNSRV-X, a Canadian company researching and applying emerging technology in agriculture. She's the managing partner as well of the 5150 million food, an AG tech fund investing in diverse founders transforming food and agriculture and an AG tech venture partner at builders VC, a San Francisco Calgary venture capital fund helping funders modernize antiquated industries with over 500 million assets under management. She holds patents for innovative technology and has published and presented widely. Alison is passionate about advancing women in STEM and in 2021 was recognized as one of Canada's most influential agricultural leaders.
And last but certainly not least, Tyler McCann is the managing director for the Canadian Agrifood Policy Institute. He spent almost a decade working in government advising ministers as well as serving agriculture and agrifood minister for most of that time. He has also worked as a consultant for farm groups, industry associations, and small and large agrifood businesses advising on government relations, policy, and association management. Tyler operates a beef and goat farm with his wife and kids in Western Quebec, so also very hands on a day-to-day basis as well.
So we've got a fantastic panel that are going to bring some really interesting perspectives to such a critical topic. So, Scott, we are going to start with you. So big, bold question to get us rolling here, why is the future of agrifood systems so important for Canada's economy as well as Canada's future prosperity?
SCOTT ROSS: It's a pretty big question like you said. I would say at the heart of it is the fact that I think agriculture in Canada has a really unique capacity to deliver resilient economic growth. And that's been demonstrated over a long time period already.
And in doing so, I think if you look at the history of Canadian agriculture, we've also been productivity superstars in the Canadian economy. In terms of our ability to drive efficiencies and productivity growth in agriculture, we really have been unrivaled in terms of our capacity to really do more with less.
And I think it's that natural capital endowment that Canada has and a relatively small population base at the same time that really does present an opportunity for us to really focus in on comparative advantages that come from that and look at how we can advance both economically and environmentally our sector in a fashion that actually responds to growing global food demand at a time where we're seeing mounting global food insecurity crises but also supports domestic growth in a sustainable fashion by really focusing in on those areas where we can be providers of quality agrifood products, whether that's fuel food, fiber, through value chains that are really leveraging those comparative advantages we have in Canada.
And as a sector, we have the capacity to sequester a lot of carbon, certainly provide a wide array of other ecosystem services and all of this coming at a time where we're seeing global and domestic markets really calling for more and more transparency and understanding of how food is produced, how fuel is being produced, and the economic and ecological benefits that come with that. So often the conversation is really focused around what we can do at the farm gate in terms of agriculture.
But I think we do need to take a step back and really look at it as a value chain and look at the broader ecosystem of industries and businesses involved in agriculture and really look at how by really investing strategically in comparative advantages that not only explore market opportunities but also look at the long term vision for what's coming in the future in those areas. There's a real potential for agriculture to continue as that resilient economic driver for the sector but with the right strategic investments really ramp that up and capitalize on some opportunities we're seeing develop that Canada really is uniquely positioned to deliver on.
And so given Canadian Agriculture's real centrality to this broader ecosystem of the food system as a whole and also potential as a supplier of low emissions fuel sources, there's really a capacity for agriculture to be at the heart of a virtuous cycle here that really supports sustainability across a wide array of different industries and can really build upon itself over time. So it's a very pivotal moment for our sector right now, I think, with the changes we're seeing in demand and the unique supply chain disruptions we've been dealing with across a whole host of different industries.
But there is a real potential and understanding that agriculture has been resilient through what we've experienced over the past few years. And coming out of that, I think we're all the stronger for it if we can strategically invest in the right places as a sector.
BRYAN BENJAMIN: Well, first of all, thank you for diving in on such a big, bold, broad question to get us started. I think we're going to be able to do some deep dives on a bunch of things that you'd referenced there interesting, especially around of transparency, collaboration, opportunity for Canada to be a real leader in this space and at a time where there's so much added complexity. Alison, Tyler, anything that you'd add to that or build on it?
ALISON SUNSTRUM: I think what I would say, Bryan, is that we have to look at our opportunity from the standpoint of the assets that we have. And Scott said a really good tone. And those assets that we have go beyond the farm gate. And I like the way that Scott said to address this, we must go beyond farm gate.
We have to look-- I think one of our strongest assets that we have is our science and technology. And we have a university system across the country that is unparalleled. And we actually see that in OECD stats. Where we fall very short is on business expenditures on research and development. And I think that on the farm, we have a lot to do with this.
I like to use a parallel. The Netherlands are the world's second largest exporter. You could fit the Netherlands inside Banff National Park where I am today. And it's a population of 17 million people. The economic strategy tables look to increase exports in Canada to 62 billion. We surpassed that. I believe we're now at about 80 billion. But the Netherlands with that small infrastructure has an annual export of about 150 billion. So we have a great potential.
One thing is the Netherlands is struggling with water, with damage to their environment. We have a chance to really take a step out and be the most sustainable, technologically-advanced, and farmer-friendly and farmer-profitable country. I'm super excited about this opportunity.
TYLER MCCANN: And, Bryan, if I may, Alison touches on something that I think really speaks to why agriculture and food in its future is so important into Canada. And that is a changing global landscape. I think often we think about agriculture and food as a domestic challenge. But the future of the world is unsettled. The future of our global food production system is increasingly unsettled.
And we need to understand that some of the fundamentals that existed over the last 30 or 40 years, an abundant food supply, the challenge of we have too much farm production, what do we do with it all is going to change too we may not have enough. And we need to think about what are these new systems. And we need to think about what is Canada's role in a constrained global food supply market.
We're seeing this today where global reserves of key staple commodities are the lowest levels that they've been or have been historically low, especially compared to instructor ratio, and especially if you take what China is hoarding out of the equation. And so we have this real difficult-- the world has this real difficult challenge of how do we feed ourselves without destroying ourselves?
And I think Canadian agriculture, building off of what Scott and Alison have talked about, is extremely well positioned to be a global leader in finding those solutions. We just need to recognize that, that is the challenge and opportunity in front of us and really put things on into high gear in order to seize it.
BRYAN BENJAMIN: Important comments around assets that we can leverage, so some of the things that Canada already is doing well. Sometimes we don't under-- or we underplay what's already working that we just need to push further versus gaps to close and a real leadership challenge. And that's really at the heart of this and an opportunity as well.
I'm going to go back to you, Alison, to start the next question here. And we're actually going to build on some of what was just touched on. And we're going to cast out to 2050, which some days it's hard to imagine what next month is going to look like let alone decades from now. But if we think about what the agri-food system can look like in 2050, how different is it going to be from today? And maybe more specifically, what will be different from what we have today?
ALISON SUNSTRUM: So I'm hugely optimistic. So I'm going to take this from an optimistic situation because there's two lens on this. From my perspective, I think that we're going to see that we're going to have a great deal more of our products being bioengineered. And that should not be fearful. We actually have new technologies, gene editing technologies that really are just speeding up evolution that can respond to some of our problems.
What we really need to do to expand on this is we have to figure out how do we get the tools and technologies into the hands of farmers. The second thing we have to look at is we have to look at the fact that my dad on a tractor is not the state of the industry. The state of the industry is that we do adopt technologies, we do adopt applications, but let's put this on a very fast trajectory.
If we look, water use is something-- we talk about carbon. And I'd like to take the conversation from net zero to net positive. And a focus on carbon has to go broader. We must focus on water, on biodiversity, and other factors. But we are going to run out of-- we're going to have 40% more demand on our water assets by 2030 than we can supply.
So how do we respond to that? By 2050, what I want to see is I want to see us using advanced connectivity, being super connected, all of our devices connected. I want to see us being principled about data, understanding that sharing of data can be done very effectively. We will then lead in this way. And then finally, let's not be afraid of precision fermentation. We have built a very strong energy industry that gets a terrible black eye. I come from Alberta, so I have a perspective here.
But we could be the strongest renewable energy. We could intersect on those. To build a strong bioengineered industry requires exactly all the tools of a world class industry like energy and mining. Let's consider that we have to focus on value added opportunities. And so I think that for Canada, we have the assets. We have the science. We have the technology. We can disrupt.
BRYAN BENJAMIN: Sounds like a call to action in there as well, which I think is quite exciting. Tyler, I'm going to go to you next around-- and let's build on what we just hit on, which is how do we accelerate agrifood transition towards net zero by 2050 and maybe net positive-- Alison, was going even a little further around-- and enhancing prosperity and competitiveness for the sector as a whole? Maybe you can pick on a couple of those points and go a little further for us.
TYLER MCCANN: Yeah, and I first want to pick up on something that Alison said that is really important. I think often our conversation around the sustainability of production and the food system today is driven about carbon accounting and are we going to be net zero or net positive?
Alison has talked about water several times. We need to recognize that biodiversity is important. We need to understand, again, economic and social sustainability. And so I really do think that when we think about the future of the food system, we really need to be thinking much more broadly than we are today. And we need to understand that, again, especially if you look at what's happening around the world, how we're using water is going to be a major driver of the future success of the food system.
So I think just in general-- again, I know today we're talking about net zero, but we really need to not lose sight of these other really critical issues that are facing us. But I think, Bryan, what we've got to do is make a decision about what we want the future of the food system to look like. Do we want it effectively and intensive, highly productive food system, highly technological food system? Or do we want to embrace effectively a low input, low output, more extensive model of agriculture?
And I think that is the debate that's playing out around the world today when we think about the future of food. I think if you look at the assets that we have, one of the things Canada does have is a lot of land. But we need to understand that, well, we have a lot of land. Only about 7% of our land base in Canada is used for food production. So this ability to have this really significant, extensive agriculture system isn't really there.
I think if you look at of these broader challenges around biodiversity around emissions, around water, really what the signs point to is that we need to leverage a lot of those assets that Alison talked about and really deliver a more productive, more intensive, lower footprint, higher output agriculture system. And I think that there's a couple of things that we need to do to get there.
I think we need to invest in R&D. I mean, we really need to really understand that this is an incredibly competitive marketplace. Canada does not do as well as we should. We're not a laggard, but we're definitely not a leader. We're probably quite comfortably middle of the pack. And in this landscape, when you look at all of the pressures that our food system is facing, the lack of R&D investment today is an issue 10 years from now.
And we are, I think, really starting to deal with the consequences of an underinvestment. If you look at the total factor productivity, this ability to drive more with less, Canada is starting to lag behind others. And we're seeing our growth in total factor productivity slow down. So we need to do more to invest in R&D, and we need to do that in our public institutions. But we also need to create more of a private ecosystem where we're driving more growth where we're seeing more Alisons that are coming out of it.
We need to look at what does a more enabling public policy environment. Look like how do we create that regulatory, that program, that policy suite that enables us to drive growth in the sector? And we need to build more sustainable value chains because, again, as Scott and Alison have talked about, this isn't just about what's happening on farms and the BMPs that farmers are using, but how are we creating the systems that are demanding and willing to pay for more sustainable food systems? How are we creating that knowledge ecosystem that's translating new innovation, new technologies back along the value chain? And how do we put all of that together to grow?
And I would just say that I think that there are some really good examples outside of agriculture and food that give us the recipe for. I think the government's critical minerals strategy and approach to building a critical minerals and EV supply chain is actually a really good model. We don't need to reinvent the wheel, Bryan. We just need to understand that agriculture and food is a lot closer to critical minerals and electric vehicles than it is to this old, antiquated view of a red barn and a farmer with suspenders out farming crops.
BRYAN BENJAMIN: Thank you for that. And I couldn't agree more. And we see this as we're trying to solve problems going in parallel paths missing opportunity to learn and collaborate. So it's great to be able to make some of those connections and share some learnings as we move forward.
Let's go a little further actually. I'm going to pick up on-- you talk about investing in R&D. Is there anything in particular that you or any of the other panelists would point to that could be maybe a catalyst to move that forward or a way to jumpstart it if it's going to be so critical to moving this along?
TYLER MCCANN: Yeah, I think, Bryan, the unfortunate reality-- and Alison may have a different answer-- but the unfortunate reality is there is so much opportunity for growth in this space, for us to do more in this space. There's probably a pretty long list of things that we can do that would have a significant impact.
I personally think that the government-- so the innovation science and economic development department had a panel that released a results earlier this year looking at the role of federal R&D. And I think there's a real call to action around mission-driven research there. And I actually think that that's what we need to see in agriculture.
If the agriculture Canada really wants to prioritize delivering more productivity growth, more sustainability, it needs to invest more. I think we've got a debate right now they're trying to reorient existing funding into these environmental priorities. I think that's the wrong approach. That existing funding is dealing with existing priorities. These are new priorities that we're adding for and adding on. And I think the federal government should be coming to the table with a significant additional investment into mission-driven research around the future of that sustainable food system.
SCOTT ROSS: I would just build on what Tyler said. I completely agree about the importance of investment.
I think another really critical element, though, in this new normal that Tyler referenced or this sense of new missions and potential mandates for a sector, one of the things we need to also look at in that context is really taking a step back and strategically assessing what we're doing well, who's doing what in our research ecosystem, and making sure that we're strategically investing in the right places and not duplicating work or overlapping where there is a real continuum of public research institutions that have to play a vital role, agriculture and agrifood Canada and our universities being a major part of that certainly, but really assessing the whole continuum of research from basic discovery research to commercialization and ensuring that we really do have that continuum well-resourced and working in concert with one another.
And central to that I think is investing in highly qualified personnel is making sure that we have the people at the center of that to keep that research going and that we've created a climate that's conducive and attractive to researchers so that we are seeing not only investments made today paying dividends 10 years from now but that cumulative growth over time of benefits of that discovery research being compounded into real world applications and innovations in the future.
ALISON SUNSTRUM: So I'm going to take a bit of a challenge to both Tyler and Scott. And I do definitely agree with their statements. I think that the government budget outside of subsidies is about 580 million. That New Zealand opportunity, they invest 2.5 billion. So if we're going to invest, we have to invest well.
Government can't invest the money. The Canadian government is not where we should be looking for money. That's why I'm focusing so much on the venture capital ecosystem, the capital markets. And I'd like to tell you where the most money sits, which we could unlock, and that's in our pension funds.
So if you take a look, our pension funds will reach almost 5 trillion by the end of this year. That's amazing. Now, the Canadian Pension, they're a really great group. I'm not giving them a knock. But their growth equity team sits in San Francisco, and their investments are made worldwide, so infrastructure investments at the lesser level.
So how do we create an ecosystem here that attracts capital? And how do we take that capital to understand that investing in food and agriculture is one of the best investments you can make? And we can actually track that through financial statistics.
So the fact that this program is being launched by sustainable finance at Ivey, this is really cool because we're combining the thought process of what it needs to take. Now, I'm going to also challenge you that I don't want to see the government streaming research, fundamental research. We need researchers working on every aspect. We need to make sure that multiple researchers are working. Now, that takes investment. So how do we do that?
The other thing that it takes is we've got great research. The University of Toronto files two US patents per week. They are a powerhouse in artificial intelligence. We have powerhouse universities everywhere. How do we make sure that these universities have the funds, the infrastructure, the capacity?
One of the ways is we make sure they commercialize their research. And we really need to see it come to market quicker. I'd say there's opportunity for all of this, but we have to look beyond the government for funding.
TYLER MCCANN: Alison is absolutely right. And I think one of the things that we have failed on in Canada to date, and although that may be changing, is attracting that private sector investment and interest in a sustainable food system. I think if you look at-- I mean, I think there was a-- maybe we've turned a corner with the announcement the launch of the Canadian alliance for net zero agriculture.
I think that that's one of the first big glimmers of hope I think that we're seeing some investments around growth and technology that Alison can speak to. We've seen Telus come into the marketplace. But these are really small, incremental pieces.
Whereas if you look at what's happening South of the border, if you look at the investments that ADM and PepsiCo are making, if you look at the investments that Walmart is making, these are value chain, significant value chain players that are making significant investments to build a more substantial, more sustainable food system to build that competitive advantage. Again, they see it as a competitive advantage.
I'm sure that the good people at Walmart have the best intentions, but they are making these investments because they see a return and a positive opportunity. And the question gets to be, what do we need to do and what do we need to change in Canada to attract and unlock that potential and that investment? And it is in the R&D and innovation side, but it is also about building higher value products that return more profitability to everyone along the chain.
Again, Kansas focused on developing an MRD system. Again, that does seem to be one of those fundamental pieces that needs to be developed so we can send that value back along the food system. But there's a lot more to it than that.
And, again, I think Alison's right. But, again, I think that government does play an important role. It would be nice if we had a discussion about what role does government actually want to play and how do we get them to be making the right, strategic decisions rather than creating this messy space where everybody wants to compete against each other and really we're not getting that basic fundamental additional research that only government will do than creating opportunities for others to drive investment in the rest of the ecosystem.
BRYAN BENJAMIN: How do we track the talent that we need to be able to move this forward to this space? And the second question I'll come to after but you can get some gears turning is, what are our educational institutions doing? What are our educational institutions need to do in order to ensure we've got the right capacity to move some of these big, bold, ambitious pieces forward? So comments on the talent needed and the talent as it is today and how we're feeling about it.
SCOTT ROSS: Yeah, maybe I'll start there. I would suggest one of the biggest things we need to address is the sense that I think in-- and this is really specific to farming and primary agriculture. But I think the history of the way profitability in our sector is characterized and looked at is a bit of a yoke around our necks in terms of there's a sense still that agriculture is a lifestyle choice not a business. And I think the sense that in doing so, you're sacrificing profitability or quality of life. And I think there's a reality that is somewhat distanced from this regressive images that exist for agriculture.
And when we look at that talent attraction piece, we do need to take a broader perspective and not look at agriculture as just farming. There is so many different aspects of the science and innovation ecosystem that are part and parcel of agriculture. And when I think of what needs to be done differently, I think, one, agriculture historically has been fairly insular as a sector. And I think what we see now with whether it's the interest from ESG investors, the kind of drivers around sustainability, is there's a lot more eyes on agriculture from many different perspectives. And I think that's a challenge but it's also an opportunity.
And when it comes to universities and the talent pipeline coming into our sector, we really need to start looking at breaking down historic silos and not focusing exclusively on agriculture and veterinary medicine as the faculties were looking at for talent. STEM as a field in general has an immense breadth of applications in agriculture.
And I think we need to start finding ways to raise awareness of what agriculture is in the modern world and what the future holds as a sector that really has the potential to be a massive source of climate solutions as well and really capitalize on the interest we see in youth around nature-based climate solutions around sustainability and positioning agriculture in a fashion that isn't portrayed as one of the problem sectors but is more focused on the future and the solutions our sector can actually drive. And in addressing some of those silos, I think there's a real opportunity to broaden the base of talent we're looking at in agriculture.
BRYAN BENJAMIN: That's great. Thanks for diving in. Jury, over to you.
JURY GUALANDRIS: I think the word silos is critical. And I think-- thanks, Scott, for bringing that up. And those silos exist everywhere in AG within our organization at Ivey, within some of the organization that we have at the table. And we know that silos bring a lack of capability to see opportunities and capitalize on those opportunities because they emerge somewhere else you don't have sight over or you're not have awareness of. And you cannot connect the dots between seemingly unrelated opportunities that are happening at the same time.
And that's why I want to certainly highlight that in terms of tech and engineering-- I'm an engineer by background, and then I studied economics and management-- it is extremely important. However, how we are going to deploy those technologies is equally important. And that's a social science type of question. What technology should be adopted, where, under what conditions, how to change the mindset and create the capabilities to facilitate an uptake of those technologies?
So the social sciences, I believe, have a lot to say in terms of how we should create social movements that go in the right direction, perhaps even sometimes fundamentally challenging some of the assumptions that we make. We are a business schools, and we teach economies of scale, and we teach comparative advantage. But sometimes those concepts come at the expense of or at the detriment of farmers themselves.
Over time, farming has been specializing and acquiring scale economies to fight against concentration of power both downstream and upstream. If you think about input suppliers that are highly concentrated markets and farmers don't have power over them, if you think about downstream processors and retailers, very, very, very big players. And so the only option for farming over time has been to concentrate specialize, acquire productivity to squeeze away small margins.
I think we need to help the farmers to come together as a community to identify what technologies should be adopted under what conditions more from a bottom up perspective rather than a top down where we say here are the knowledges you have to use. Go after using them.
The same applies in academia. I think as an academic, I'm often paid based on-- my recognition come from top publications in specific journals. To publish there, it takes years, and you have to be extremely specialized. So there's no incentive really for cross-disciplinary. What we are trying within the center is to look at one problem from multiple perspectives so that those talents are trained with a much broader toolkit. But, again, that's an aspiration. We're working on it.
BRYAN BENJAMIN: Hey, guys, start with an aspiration. Those are great comments. And I think you both hit on some important perspectives in terms of what can educational institutions do, how do we cross collaborate and bring different perspectives, and resetting maybe some historical assumptions about what the sector is and what opportunities actually exist. We know that there's tremendous opportunity. And I think we're going to be attracting a much broader talent pool than potentially in the past.
Alison, I'm going to put you back on the seat here because Jury got us going a little bit on technology. And so let's talk about the next wave of technical innovation and what do you see coming and impact on the sector as we move forward, also with that lens of attracting broader talent pools that want to be on the leading edge of some of this and start to move it forward for us.
ALISON SUNSTRUM: So I was asked by a young man who was in the audience at a conference last week, and he asked me-- he said, I'm graduating. What should I take at university? I want to be a venture capitalist. And I said, well, what do you think? And he said, what I think I need to do is I need to learn about investment banking.
And I said, no, you need to start as an engineer. And I was really delighted to hear that's where Jury's background is. Start as an engineer or start in biology because that is where-- and then get your investment banking, and you will be unique. That is where we need to see our skills and talents. The advancement of science and technology is where we look. And that's the space that I invest in.
So I'm going to tell you what I invest in. I invest in AG biotechnology that's looking out about 15 years. I want to help them get to market quicker. So I'm looking deeply at gene editing for plants as it relates to climate change. I am looking at advanced genomics and sequencing to really look at how we can improve the efficiency of livestock.
If livestock could create less manure, we'd have less problems. Could we do something in this regard? Secondarily, I'm looking directly on farm. And it's I02 2.0. If we have this advanced connectivity, let's connect all our devices. I actually think that we have to look at automation and robotics and cobotics. We're not replacing people.
And finally, I'm looking deeply at spaces that can disrupt our supply chain. A connected supply chain is an effective supply chain. And I would say that the farmer holds a lot more power than he thinks he does as long as he knows how to negotiate his contracts and governments give him a little bit of a lever financially to want bigger players to pay more. And then finally, I think the consumer is very much part of this, and so nutrient dense foods and the things that we must change in our production practices.
And I've got to give real kudos to Tyler to talk about total factor productivity. We've got to be measuring our outcomes very much differently than just inputs, outputs. What are we actually doing that's affecting? I'm so excited, Bryan, that the potential of technology will disrupt all of this. And I think that's the way that we're going to respond to a net positive world.
BRYAN BENJAMIN: That's fantastic. I love how you responded to the question you got asked at the conference and really challenging people to think about different paths and different combinations because they're preparing for a different future than we've had. Tyler, Scott, any additional comments on this topic?
SCOTT ROSS: I do think it's interesting how much things-- so things are changing. So it used to be generations ago that everyone had a fairly direct connection to agriculture. People knew the farm. People worked on a farm, had grandparents that worked on a farm.
We've gone through this phase where I think that drift between the food production system and consumers has gotten to the point where often consumers only interaction with the food production system is when they purchase their food at the restaurant. But I think we're starting to see this change come back around where people are coming back to agriculture and food. They're not coming back fast enough for those of the people that are in the food production system. They're not coming back fast enough for everyone that's trying to fill that skills and labor gap that exists in Canada today.
But I think that we do see this growing interest from other fields and the potential that's there in these new opportunities that are coming down and the ability to take again developments that are happening in other systems around the internet of things and bring them back into agriculture and food. I think that, that creates an interesting dynamic that's changing. And I think it creates a new way for people to get back involved and get back connected again to the food production system.
I want to pick up on something that Alison said about the role of the consumers. And I think that we do have to understand I think the success of a sustainable food system will come whenever consumers understand the important role that they play and that their choices play in a sustainable food system and when consumers are prepared to invest in the food system. And I really do think that the current challenge around food inflation has potentially interesting dynamics.
One of the biggest challenges around the sustainability of the food system today is the amount of waste that occurs in it. In a developing country and especially in a system like Canada's, most of that waste is happening once the food leaves the grocery store. Our food production system is relatively efficient. Hopefully, consumers are becoming more cognizant of their role in that and are taking steps to reduce the waste that they have. But it's also putting challenges on their ability to pay more for more sustainable food.
And as we look for that food system to do more, as we look for the food system to produce more affordable food to address their concerns, that puts pressure for us to ask it to do more on a sustainability perspective and understanding where that delta is and how we close that gap between do we want an affordable food supply or do we want a more sustainable food supply? Do we want a more resilient food supply?
Those three things require different actions. Again, we're talking about sustainability today. But I think if you went out and talked to a lot of consumers, they're probably going to say right now their biggest concern is, can they actually afford the food that's in the grocery store?
BRYAN BENJAMIN: Thank you for referencing something that is on the mind of pretty much everyone right now in terms of affordability. But I like those dichotomies. It's not a how do we move from I got to choose this or I have to choose this to actually can we achieve both. It's not an or. It's an and situation that we're looking to move ourselves towards.
In order to lead and really compete on a global stage, could you pinpoint one or two big priorities that need to happen now in order to make some of that?
ALISON SUNSTRUM: One of the things that we have to do is we have to have effective trade discussions. So we have to be an effective partner, and we also have to be able to negotiate effectively. Without open borders, we cannot trade. And as Canadians, our marketplace is small enough, right back to the Netherlands example. We've got a huge trading partner on our doorstep.
And another one below that one, we have the ability to export widely, lots of constraints, transportation, logistics. And so we really need to emphasize that, yes, we can grow the food, or we can engineer the food. We have to have an effective transportation network. We have to really deal with some of our constraints. So I think those are some of the things that we have to do. And then we also have to have the belief that we can compete and we definitely can.
So if you do develop technology, as I did, and scale it globally, you have to understand the constraints, the strengths, the opportunities that exist in different marketplaces. So we need to be far more global in our education system, in our thinking. And then there's an area that's really important. We have to protect our intellectual property and we have to know how to monetize it.
BRYAN BENJAMIN: There is a lot in that. I love the belief that we can compete. We don't want to be our own worst enemy and hold ourselves back. We got to aspire and drive those forward. So, Scott or Tyler, I heard one of you were going to jump in there.
SCOTT ROSS: Yeah, I just wanted to say that, again-- I'll go back to R&D as a very easy place where we need to do more quickly in order to be a leader. But I really think one of the things that we often struggle with when it comes to agriculture and food and that global perspective is that agriculture and food is more than just a trade issue globally. Alison talked about how important it is.
But I actually think that if I was the Canadian government, and I was looking to try and understand what role Canada plays on the world stage today, what role we play as a middle power, what strategic assets that we have that we could leverage, agriculture and food really should come to the top of that list and it. And I often think it's quite disappointing that we don't see the government embrace agriculture and food as a geopolitical lever and tool and really championed that leadership on the global stage.
And it should be about more than just opening markets, but it should be about building better relationships. It should be about encouraging international development. And so I just want to make a plug that global leadership on food should be about a lot more than just exporting more food that's really important. But it's such a great, great opportunity for Canada.
BRYAN BENJAMIN: Any final comments or thoughts on this topic? And with that lens of Canada can really play here on a global stage, we've got such a unique opportunity in front of us that would support us both here at home but also to be able to support us as a contributor globally. One or two final thoughts, 30 seconds each. I'm going to go to Scott first.
SCOTT ROSS: One of the things that comes up often in agriculture is these dichotomies between small scale intensive, a lot of language around what agriculture should look like. And I think we need to take a step back and recognize that the future of agriculture is going to be data-driven and that we need to invest in the infrastructure to be able to respond to market demands.
Farmers will produce what the market is asking for. They need to first understand what that demand means and secondly have the tools available to actually respond to that demand. And so we need to really look at investments and things like measurement, reporting, and verification systems and the ability to be nimble and agile in the marketplace. And I think in doing that, farmers are empowered and enabled to address a whole host of the different issues we talked about today.
BRYAN BENJAMIN: Amazing. Let's go to Tyler next. Alison, you know you're up next, so you get a little more time to think.
TYLER MCCANN: Yeah, Bryan, I think it's important to understand that Canada is a leader in sustainable agriculture today. Our adoption of motel is higher than it is in the rest of the world. Our pesticide usage rates are lower than they are in a lot of other competitive markets. Our nitrogen fertilizer balance on our agricultural land is better than it is most other places. But our advantage is shrinking.
Other countries are going out of their way to close that gap with Canada. And we need to realize that we will at some point in time may lose our ability to say that Canada's got one of the most sustainable food systems in the world. And we need to work harder and go further and do more from a positive opportunity-based perspective to grow that gap and maintain the advantage that we have.
BRYAN BENJAMIN: Really, really glad you mentioned that. That's one of the challenges. When you're in a leader position in some aspects, sometimes there's a bit of a target on your back as others try to catch up. So how do we maintain that advantage while looking for places where we do need to play a bit of catch up as well? So excellent point. Alison, closing comments from you.
ALISON SUNSTRUM: OK, we've got some really big problems. And I would suggest that we have to focus on solving the problems we can quicker, I'd take a skunk work approach. We need radical change occurring across the country at the same time.
And the final statement I would have is the Netherlands think of themselves as an agricultural nation for the world. Canada is an innovation, agricultural nation, and every single child that comes out of school must be able to articulate that. So let's say what a huge opportunity agriculture and science and technology. And I've just been delighted to join the panel today.
SEAN ACKLIN GRANT: Thank you for tuning in to Leadership in Practice. We’d like to thank our guests: Scott Ross, Alison Sunstrum, Tyler McCann, and Jury Gualandris. Leadership in Practice is produced by Melissa Welsh, Joanna Shepherd, and me, Sean Acklin Grant. Editing and audio mix by Carol Eugene Park.
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